Siebel shares hit by rumours

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Shares of Siebel Systems crashed by 10 per cent amid rumours that its chief financial officer is set to quit, the sale of a convertible bond and speculation about problems with its accounting practices.

Wall Street analysts were puzzled by the idea that the company might issue a convertible bond offering as well as rumours that the company might be hit by accounting issues similar to those that are alleged to be impacting Computer Associates. Furthermore CFO Kenneth Goldman’s future with the company was said to be in doubt, although a spokeswoman denied this was the case.

Convertible bonds can be traded in for stock and can dilute the value of existing shareholders' stakes in the company's stock. Siebel, at the end of 2001, had 519 million shares outstanding on a fully diluted basis, assuming all options outstanding had been exercised.

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